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Application of tax deduction in Türkiye in case the company that receives tax deduction in investments transfers the business

September 19, 2022

If the investment is transferred before it becomes operational, the transferee organization will be able to benefit from the deducted tax rate, provided that it fulfills the conditions specified in the relevant legislation. In case the investment is transferred before it becomes operational, it is not possible for the transferor organization to benefit from the deducted tax rate due to this investment.

If the transfer of the investment after it has been partially or fully operational, the transferor until the transfer date and the transferee after the transfer date will be able to benefit from the deducted tax application provided that the conditions specified in the relevant legislation are fulfilled.


Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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Who are the taxpayers covered by the regulation on disguised profit distribution through transfer pricing in Türkiye?

September 18, 2022

The application of transfer pricing is applicable to all Turkish real people and institutions that are both full and limited taxpayers. Within the framework of disguised profit distribution through transfer pricing, the purchases or sales of goods or services made by these real people and entities with connected parties in regard to their domestic and international activities will be assessed.

According to the Corporate Tax Law, profits will be regarded to have been implicitly divided through transfer pricing, in whole or in part, if corporations buy or sell products or services from related parties at the price or at a price that is decided in breach of the arm’s length principle.

The term “organization” includes capital companies, cooperatives, public economic institutions, associations or foundations and their economic enterprises and business partnerships.

In terms of the Income Tax Law, if the undertaking purchases or sells goods or services with related parties at the price or prices determined in violation of the arm’s length principle, differences between the arm’s length price or prices and the price or price applied by the owner of the enterprise, to the detriment of the enterprise, shall be deemed withdrawn from the enterprise.

In the application of the Income Tax Law, the term “entrepreneur” includes real persons and partners of ordinary partnerships subject to income tax in terms of commercial and agricultural income, partners of collective companies, limited partnerships of ordinary and limited partnership companies.


Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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How is the taxation of income from securities investment funds and securities investment associations in Türkiye?

September 16, 2022

Withholding on share certificates traded on Borsa Istanbul

Return of participation shares of securities investment funds established in accordance with the Capital Market Law to the relevant fund, incomes arising from their sale to third parties and periodical returns obtained during the period they are held, and incomes obtained from trading of share certificates of securities investment association, are taxed through withholding within the scope of temporary article 67 in Türkiye.

The withholding rate is 10% for real persons and 0% for institutions. Income from the participation shares of share certificate-intensive funds is taxed at 0% for both natural persons and corporations.

On the other hand, in accordance with the Presidential Decision dated 22/12/2020 and numbered 3321, except for variable, mixed, eurobond, foreign borrowing, foreign, hedge funds and mutual funds with the phrase “currency” in their titles, 0% withholding rate is applied for income and gains from mutual funds acquired between 23/12/2020 and 31/3/2022 (including this date).

Income arising from the disposal of investment funds held for more than one year, of which at least 51% of the portfolio consists of stocks traded in Borsa Istanbul, are not covered by withholding.

It is not necessary to submit an annual declaration for these incomes.


Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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How will Turkish citizens who live abroad be taxed on their earnings from movable assets?

September 15, 2022

Turkish citizens living abroad for more than six months after obtaining a work or residence permit are taxed on the basis of limited liability in terms of their earnings and revenues in Türkiye.

If Turkish citizens to be taxed on the basis of limited liability, all of their income in Türkiye consists of withholding taxed securities, no declaration will be submitted.

Those who are subject to limited liability will declare all of their non-taxable earning on movable assets in Türkiye with an individual declaration within 15 days from the date of acquisition and pay their taxes within the same period.

You can contact us for further information.


Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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How will Turkish citizens who live abroad be taxed on their earnings from movable assets?

September 15, 2022

Turkish citizens living abroad for more than six months after obtaining a work or residence permit are taxed on the basis of limited liability in terms of their earnings and revenues in Türkiye.

If Turkish citizens to be taxed on the basis of limited liability, all of their income in Türkiye consists of withholding taxed securities, no declaration will be submitted.

Those who are subject to limited liability will declare all of their non-taxable earning on movable assets in Türkiye with an individual declaration within 15 days from the date of acquisition and pay their taxes within the same period.

You can contact us for further information.


Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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What are the conditions to benefit from the income exemption of real estate sales according to the Corporate Tax Law in Türkiye?

September 14, 2022

This exemption is stipulated in Article 5/1-e of the Corporate Tax Law No. 5520 in Türkiye. Moreover, detailed explanations are given in the section titled “5.6. Exemption from sales of immovables and participation shares and founder’s shares, dividend shares and pre-emption rights” of the Corporate Tax General Communiqué with Serial No.1.

Conditions to benefit from the exemption:

– Keeping immovables and participation shares, founder’s shares, dividend shares and pre-emption rights in asset account for at least two full years,

– Keeping the part of the sales income benefiting from the exemption in a special fund account in liabilities until the end of the fifth year following the year of the sale,

– Collection of the sale price until the end of the second calendar year following the year in which the sale was made,

– Non-withdrawal of earnings held in the fund account (In the exemption application, in case of transferring from the fund account to another account (excluding addition to the capital) within five years, the earnings that should be kept in a special fund account in liabilities until the end of the fifth year following the year of sale, and withdrawing from the business, in case the company is transferred abroad by limited taxpayer institutions or the business goes into liquidation within this period, taxes that are not accrued on time due to the exemption applied for the part of the income subject to these transactions will be collected together with tax loss penalty and delay interest in accordance with the Tax Procedure Law.)

– Not dealing with securities or real estate trade.


Source: Revenue Administration of Republic of Türkiye
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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In July, employment in Italy slightly decreased and unemployment rate down at 7.9%

September 14, 2022

In July 2022 the number of both employed and unemployed persons decreased, while a growth was recorded for inactive people in Italy.

On a monthly basis, the decline of employment (-0.1%, -22 thousand) involved only women and was widespread in all age classes, with the exception of over50: among these -as well as for men- employment grew. Overall, the employment rate dropped to 60.3% (-0.1 p.p.).

In the last month, the drop of unemployed persons (-1.6%, -32 thousand) was recorded for both genders and concerned mainly people in the 35-49 age class. The unemployment rate declined to 7.9% (-0.1 p.p.), while the youth rate rose to 24.0% (+0.1 p.p.).

In July the increase of inactive people aged 15-64 (+0.4%, +54 thousand) concerned men and women and people aged less than 50 years. The inactivity rate rose to 34.4% (+0.2 p.p.).

In the period May-July 2022, with respect to the previous quarter (February-April 2022), employment rose (+0.6%, +140 thousand).

In the last three months, a drop was registered for both unemployed persons (-4.2%, -89 thousand) and inactive people aged 15-64 years (-0.6%, -79 thousand).

Compared with July 2021, the number of employed persons increased by 2.0% (+463 thousand), the growth concerned both genders and all age groups except 35-49 years; the employment rate showed an increase of 1.6 p.p. .

On a yearly basis, the rise of employed people was accompanied by a decrease of both unemployed persons (-13.3%, -304 thousand) and inactive people aged 15-64 (-3.3%, -433 thousand).


Source: ISTAT
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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Inflation in Belgium rose from 9.62% to 9.94% in August, reaching its highest level since March 1976, when it stood at 9.96%

September 13, 2022

Consumer price index  in Belgium – August 2022

  • Inflation rose from 9.62% to 9.94% in August, reaching its highest level since March 1976, when it stood at 9.96%.
  • The consumer price index this month increases by 1.00 points or 0.81%.
  • Inflation based on the health index has increased to 9.70% from 9.07%.
  • The smoothed health index is running at 119.39 points in August.
  • The high inflation this month, as in recent months, is largely due to high energy prices. Energy currently has an inflation rate of 49.81% and accounts for 4.43 percentage points of the total inflation.
  • Furthermore, inflation for food products has also sharply increased in recent months. Inflation for food products (including alcoholic beverages) stands at 9.71% this month, The contribution of food products to inflation currently amounts to 1.92 percentage points.
  • Core inflation, which does not take into account price evolutions of energy products and unprocessed food, stands at 5.74% in August, compared to 5.49% in July. This is a result of increased inflation for processed food and services.
  • The main price increases in August concerned electricity, natural gas, bread and cereals, clothing, confectionery, alcoholic beverages, hotel rooms, meat and personal care products. However, motor fuels, domestic heating oil and fruit had a downward effect on the index.

The inflation rate in August was 9.94% compared to 9.62% in July and 9.65% in June. Inflation based on the health index amounted to 9.70% this month compared to 9.07% in July and 8.72% in June. Inflation without energy rose to 5.99% compared to 5.76% in July and 5.26% in June. Core inflation, which does not take into account price evolutions of energy products and unprocessed food, was 5.74% in August, compared to 5.49% in July and 5.07% in June.

Inflation for services has risen from 5.08% to 5.36%. Inflation for rents remained almost unchanged, going from 3.74% to 3.73%. Inflation for food products (including alcoholic beverages) stands at 9.71% this month, compared to 9.24% last month. This inflation rate has risen sharply in recent months. In November last year, it was still 0.47%. In particular, inflation for oils, fish, dairy products, bread and cereals and meat has sharply increased in recent months. Inflation for oils stands this month at 21.3%. In November, it was still 3.6%. For fish, inflation is now 13.2% compared to -0.4% in November. Inflation for dairy products amounts to 12.4% this month compared to 0.6% in November. For bread and cereals, it stands this month at 12.7% compared to 1.7% in November. Inflation for meat amounts this month to 10.2% compared to 0.8% in November.

The sharp increase in inflation since autumn 2021 is largely due to energy products. Energy inflation is now running at 49.81%, compared to 49.11% last month and 55.99% in June. Electricity is now 57.2% more expensive than a year ago. Natural gas is 106.9% more expensive than in August last year. The price of domestic heating oil, calculated based on a smoothed 12-month moving average, has increased by 52.6% in one year. Motor fuels are 21.0% more expensive than last year.

The high inflation is mainly due to the high energy prices. Energy currently has an inflation rate of 49.81% and accounts for 4.43 percentage points of the total inflation. Food, with an inflation rate of 9.71%, contributes 1.92 percentage points.

The price of natural gas has increased by 12.3% on average compared to the previous month. Prices for electricity have gone up by 11.5% on average this month.

The consumer price index has increased by 1.00 point or 0.81% in August 2022 and now amounts to 124.05 points, compared to 123.05 points in July 2022 (2013=100). The health index has gained 1.33 point to 123.68 points in August, compared to 122.35 points in July. The smoothed health index is running at 119.39 points in August. The next central index for public service and social benefits is set at 120.73 points.

The main price increases in August concerned electricity, natural gas, bread and cereals, clothing, confectionery, alcoholic beverages, hotel rooms, meat and personal care products. However, motor fuels, domestic heating oil and fruit had a downward effect on the index.


Source: STATBEL
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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How digital connectivity facilitates inclusive global trade?

September 13, 2022

UNCTAD has released a new compendium featuring the experiences of 22 countries participating in its Automated System for Customs Data (ASYCUDA) programme.

ASYCUDA – UNCTAD’s largest technical assistance programme – supports customs authorities in over 100 countries to expedite the clearance of goods and ease trade.

The report, the third edition in a series of ASYCUDA case studies, highlights the programme’s success in enabling digital connectivity for inclusive trade.

“The COVID-19 pandemic has intensified the digitization of trade processes and procedures,” said Shamika N. Sirimanne, director of technology and logistics at UNCTAD.

“Country experiences during these trying times illustrate how ASYCUDA has helped user countries to grow their international trading activities as they reignite their economies,” Ms. Sirimanne added.

Higher customs revenues, shorter clearance times

For example, in Bangladesh, customs revenues increased by 50% between 2017 and 2021, from $6.43 billion to $9.62 billion. And 73% of imports were cleared within three days in 2021.

In Bosnia and Herzegovina, import transactions rose by 32% between 2020 and 2021.

In Burundi, an ASYCUDA-based module enabled the health ministry to monitor and control the international trade of medicines and medical equipment, enabling the processing of 71% of medical imports in less than 24 hours in 2021.

In Djibouti, customs revenues have shot up by 95% – from $116 million to $226 million – in the past decade thanks to ASYCUDA. The country cleared 94% of goods in transit in less than 24 hours in 2021.

In Dominica, 65% of commercial imports are cleared by customs authorities within 24 hours.

And in Papua New Guinea, customs authorities reduced clearance times from seven days to two hours in 2021.

 

ASYCUDA helps countries ease trade and boost revenues

ASYCUDA helps countries increase customs revenues and reduce the time and cost of trade
Source: UNCTAD and data from national customs authorities

Automated data exchange, better communication

The report shows how user countries have benefited from the automated exchange of standardized trade information and data, thanks to ASYCUDA.

It outlines how ASYCUDA bolsters communication and coordinated intervention among trade stakeholders, including partner government agencies.

With new IT-based tools, the programme enables countries to modernize customs management systems and generate much-needed up-to-date trade data.

To complement its technological solutions, the programme delivers capacity-building activities to ensure system sustainability and ownership by user countries, and alignment of their domestic trade regulations with international norms.

The report explains how ASYCUDA empowers vulnerable economies – least developed countries, landlocked developing countries and small island developing states – to improve efficiency, transparency, accountability and risk management.

New solution to connect systems

To harmonize and facilitate the integration and exchange of trade information, ASYCUDA is piloting ASYHUB, an open standardized platform for processing and integrating data between the programme and third-party systems.

This solution will offer a smart framework to efficiently interconnect government systems and applications.


Source: United Nations Conference on Trade and Development
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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GDP in Bulgaria grew by 4.0% in the second quarter of 2022

September 13, 2022

In the second quarter of 2022, gross domestic product (GDP) in Bulgaria grew by 4.0% and gross value added (GVA) by 4.5% compared to the second quarter of 2021 (data are preliminary and seasonally adjusted).

The increase in gross value added is determined by the growth in following economic activities:

Mining and quarrying; manufacturing; electricity, gas, steam and air conditioning supply; water supply, waste management and remediation activities – 11.9%, Information and communication – 5.6%, Professional, scientific and technical activities; administrative and support service activities  – 5.2%, Wholesale and retail trade; repair of motor vehicles and motorcycles; transportation and storage; accommodation and food service activities – 4.7%, Financial and insurance activities – 3.9%, while in Construction is observed decline of 16.4% on an annual basis.

Regarding the components of the final use, the impact for the registered economic growth in the second quarter of 2022 is the final consumption with an increase of 5.2% on an annual basis. Exports of goods and services increased by 10.4% and imports of goods and services increased by 16.7% compared to the second quarter of 2021.


Source: REPUBLIC OF BULGARIA NATIONAL STATISTICAL INSTITUTE
Legal Notice: The information in this article is intended for information purposes only. It is not intended for professional information purposes specific to a person or an institution. Every institution has different requirements because of its own circumstances even though they bear a resemblance to each other. Consequently, it is your interest to consult on an expert before taking a decision based on information stated in this article and putting into practice. Neither Karen Audit nor related person or institutions are not responsible for any damages or losses that might occur in consequence of the use of the information in this article by private or formal, real or legal person and institutions.


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